Finance Minister Arun Jaitley will present the NDA government’s final full budget before the 2019 Lok Sabha polls. This budget is the first after the rollout of Goods and Services Tax (GST) and demonetisation. Here is a look at how the government steered India’s economy with major policy decisions and reforms in the last four full budgets:
Union Budget 2014-15
The first full budget of the Narendra Modi government saw the introduction of several new policy changes, tax reliefs and reforms to boost manufacturing and infrastructure. The budget raised exemption limit on individuals from Rs 50,000 to Rs 2.5 lakhs, and Rs 3 lakh for senior citizens.
One of the major steps building up to the Make in India initiative was increase in foreign investment, particularly in manufacturing. Foreign direct investment (FDI) limit for defence and insurance sectors was raised to 49 per cent. Also, composite cap on FDI raised to 49 per cent with full Indian management and carried out under the FIPB route.
The budget announced new IIMs (5), IITs (5) and AIIMS like institutions (4). Digital India initiative was also introduced as one of the flagship projects of the government to connect each citizen through a modern digital infrastructure and to boost technology-driven innovation and growth.
Smart Cities mission was introduced to develop 100 cities with world class infrastructure. Five-year Namami Gange project was introduced to clean up the Ganga and preserve its ecology. The five-year estimate for the project was Rs 20,000 crore.
Union Budget 2015-16
In taxation, changes were seen more in indirect taxes. Service tax was increased to 14 per cent from 12.36 per cent, in direct taxes, notably, wealth tax was abolished, while a provision was brought in for 100 exemption in contributions toward Swachh Bharat Mission under corporate social responsibility.
Make in India initiative was launched to boost manufacturing sector in India and transforming the country into a manufacturing and export hub.
In a remarkable decision, Planning Commission of India was transformed into government’s think tank NITI Aayog. Five-year plan models were dropped with focus on research and development.
One of the biggest promises of BJP’s achhe din vision was a house for each citizen. Housing for All by 2022 was launched with an aim to provide affordable housing for urban and rural populations, particularly the lower income groups and economically weaker sections.
The trend to increase centres of excellence in management, medicine and technology was maintained. The government announced new IIMs (2), IITs (2)–one converted from Indian Institute of Mines, and six new AIIMS like institutions.
India’s resolve to reduce carbon footprint was asserted with ambitious targets for capacity generation in renewable energy. The government proposed 100 gigawatt capacity generation in solar, 60 gigawatt in wind, 10 gigawatt in biomass and 5 gigawatt in small hydro.
Tourism got a boost with Visa on arrival program program. The facility was available for 150 countries.
Skill India was pushed to provide skilled workers in industries to meet the gap in skilled labour.
Union Budget 2016-17
With an aim to fight black money, the government announced a limited tax compliance window of four months to declare undisclosed income with 45 per cent surcharge and penalties.
Housing benefits were provided to tenants and homebuyers. Deduction for rent was raised to Rs 60,000 from Rs 20,000. For housing loans up to Rs 35 lakh, the budget announced Rs 50,000 additional exemption on condition that the cost of the house must not be over Rs 50 lakh. It also removed service tax on construction of houses smaller than 60 sq m.
The government decided to turn 10 public and 10 private educational institutions into “world-class” centres of excellence. Concurrently, to promote entrepreneurship among the youth, entrepreneurship training was introduced from schools and more advanced training in colleges.
FDI received another boost as 100 per cent FDI was allowed through FIPB route in marketing of food products produced and manufactured in India. Additionally, Companies Act was amended to create “enabling environment” for startups. A fund was also established to give seed capital for startups working on innovation in certain sectors.
Union Budget 2017-18
In order to promote tourism and tourism-generated employment, Incredible India 2.0 campaign was launched across the world.
To address rising number of railway accidents, the government formed a Rashtriya Rail Sanraksha Kosh with a corpus of $ 14.8 dollars for five years.
Digital economy got a big push with a target of 25 billion digital transactions in the fiscal via Unified Payment Interface (UPI), UnUnstructured Supplementary Service Data (USSD), Aadhar Pay, Immediate Payment Service (IMPS) and debit cards. Also, cash transactions above Rs 3,00,000 were banned with specific exceptions.
Attempt to make political funding more transparent with limit of Rs 2,000 set on cash contribution from individuals. To simplify tax filing and increase the number of taxpayers, a new one-page income tax return form was introduced for individuals with income up to Rs 5 lakh other than business income.